Dear America: Sorry, but you can’t have more affordable flights to Europe. Love, Congress.

posted at 7:01 pm on June 12, 2014 by Erika Johnsen

Looking for a relatively inexpensive flight from the East coast over to Europe this summer, perhaps for a budgeted vacation or to visit family abroad? Well, that’s really too bad, because certain rent-seeking actors within the highly regulated and unionized American airline industry would rather you didn’t have that option in order to keep the air-travel marketplace “fair” — which is to say, to keep the marketplace unfair, but in their favor.

Norwegian Air recently opened an affiliate, Norwegian Air International, based in Ireland with the intention of offering transatlantic flights between the United States and Europe — but with a business model that employs Thailand-based flight crews through a Singaporean pilot supply company, unions are calling it the “Walmart-ing” of the international airline industry and entrenched corporations are not at all pleased with the competitive prices NAI is offering. Last December, Delta, United, and American airlines all signed a joint letter to the U.S. Department of Transportation pleading the administration to reject NAI’s pending application for the required operator certificate because the new airline is clearly seeking “to establish a new flag of convenience in Ireland to avoid Norway’s labor laws and lower labor costs.” As Fortune reported last month:

“We’re fine with competition as long as it’s on a level playing field,” Michael Robbins, the Pilots Association’s director of government affairs, told Fortune.

The discount airline currently operates a long-haul business and even flies between Oslo and New York’s Kennedy Airport under a temporary permit issued by the government in Norway. To offer additional flights between Europe and the U.S., Norwegian filed a still-pending application for a permanent permit with the U.S. Department of Transportation in December.

Robbins says the Pilots Association rarely opposes permit applications, but it took issue with Norwegian’s filing because the airline decided to move its long-haul business from Oslo to Dublin, Ireland earlier this year. It filed its permit application with the Department of Transportation as a “foreign air carrier of Ireland” even though it offers no flights to or from the country.

The Pilots Association has painted the move as part of a scheme by Norwegian Air to evade Norway’s strict labor laws and its collective bargaining requirements. Ireland has weaker labor laws that will allow the airline to keep labor costs low by outsourcing its crew to Asia — a strategy that ran aground of Norway’s stricter regulations.

Oh, the move is “part of a scheme by Norwegian Air” to evade more expensive taxes, labor laws, and regulations? A.k.a., part of a smart business plan to cut down on costs and provide a product at a better price than their competitors, as all good companies should be doing?!

Instead of lobbying against Norwegian Air, perhaps these well-established major airlines and employees should be lobbying against the taxes, labor laws, and regulations that inhibit their ability to compete against innovative services in this growing and interconnected global market of ours — but that’s really not the way our bureaucratized government (nor the rent-seeking cronyists who nurture it) works, is it? Via USA Today:

The House approved legislation Tuesday to prevent a Norwegian airline from flying to the USA because of concerns the low-cost carrier will dodge international labor rules. …

But an amendment added late Monday by voice vote from Reps. Lynn Westmoreland, R-Ga., and Peter DeFazio, D-Ore., seeks to prevent the Transportation Department from granting approval of Norwegian Air International to serve the USA. …

“Congress has a responsibility to make sure that U.S. airlines do business in a fair marketplace and that the U.S. government’s transportation funds don’t hand an advantage to foreign airlines that try to cheat the system,” said Capt. Lee Moak, president of the pilots union.

Translation: Congress has a responsibility to bypass executive jurisdiction on the particular behalf of U.S. airlines so that they can continue to offer unnecessarily overpriced flights to American consumers by preventing an innovative company from bringing about change that can improve the system. Access, denied.

John Byerly, a former State Department official who now serves as a consultant to the Norwegian airline, was chief negotiator for the 2007 agreement for unfettered airline service between the USA and Europe. He said rejecting the airline proposal could lead to a trade dispute.

“It is simply absurd and ridiculous to assert that the U.S. aviation industry — making record profits, paying high dividends and buying back stock — is in a crisis,” Byerly said. “This is just over the bend.”

Here, by the way, is the list of the 33 House Republicans that sent a letter to Transportation Secretary Foxx the other day opposing Norwegian Air’s application. Unbelievable.

The Senate still has to have its say on the transportation bill (and the White House opposes the legislation as-is for other reasons), but don’t let the airline-specific bells and whistles of this debate drown out what’s really going on here. This is at its core yet another instance of free-trade-hating Labor Interests and incumbent Big Businesses doing everything they can to prevent the free market from working like it can and should, to their niche benefit but net economic detriment. If the United States wants to be able to sell its goods and services abroad, i.e. maintain a strong and profitable export market, then it has to be willing to accept the imports of its international competitors, too. At the end of the day, this is just the sort of junky protectionism that helps exactly nobody.

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Time to stay home America, it’s not all that safe for Globe trotting to Europe. Sorry businessman ask your employer for a bigger travel allowance. Boycott airlines, boycott Europ, it’s a win win.. You won’t be missing much.

I just flew Norwegian from LA to Stockholm and from Copenhagen back to LA. They use brand new 787′s (when they’re working) and the business class seats were 1/3 the price of the of the other airlines.

The good news: The 787 from LA was outstanding with a nice entertainment system at each seat although it was obviously a budget deal with modest boxed meals, etc.

The bad news: Norwegian keeps having problems with the 787′s and uses a charter outfit based in Portugal called Euro Atlantic. They only have one long haul plane and it’s a 17 year old piece of junk 777-200 that is horrid inside.

We changed our flight a day earlier to avoid the Euro Atlantic outbound but the 787 was switched to it at the last minute coming back and there was no escape.

I don’t care if these flights involved seeing the lovely sights in Afghanistan (such as the blown up Buddhas)…the point is, it’s government interference with private enterprise.

If folks don’t like this airline’s business practices, then it’s them as consumers who (should) have the right not to spend their money for their services and spend it elsewhere instead.

At any rate, it’s a collapsing system and these stupid, cronyist measures at the hands of a corrupt political class will do nothing positive in the long run to save these industries…and in the long run won’t be the cause of their demise, either. Congress is fast reaching the point of being incapable of doing either good or bad.

Even without unions and such, I don’t see how these airlines can continue to offer “cheap” airfare…and if they don’t, traffic will go down and they’ll be facing bankruptcy…a Catch-22. The cost of doing business (or municipalities/states trying to build and maintain things) are becoming prohibitive.

At some point, even with what should be “enough” money to do X, it still won’t be able to be accomplished. The various cogs and gears of the system are grinding to a halt. And it won’t matter how bright, hard-working or innovative one is, the rest of the system will be too broken to matter.

Anyone old enough to remember flying Icelandic Airways from JFK to Luxumourg in the early 1970′s? In those days, their bare-bones stretch-DC8 was the only affordable way to get to Europe. Apparently, punitive airport agreements prevented them from offering a cheap trans-atlantic non-stop, so it included a mandatory hour-long stop in Reykjavik in both directions. Since you were in-transit, you couldn’t leave the one-room “waiting area” that was nothing more than a high-pressure sales room for overpriced Icelandic trinkets.

Anyone old enough to remember flying Icelandic Airways from JFK to Luxumourg in the early 1970′s? In those days, their bare-bones stretch-DC8 was the only affordable way to get to Europe. Apparently, punitive airport agreements prevented them from offering a cheap trans-atlantic non-stop, so it included a mandatory hour-long stop in Reykjavik in both directions. Since you were in-transit, you couldn’t leave the one-room “waiting area” that was nothing more than a high-pressure sales room for overpriced Icelandic trinkets.
bofh on June 12, 2014 at 7:43 PM

:) I remember it, but never flew it. My mom used to fly it every other month for her cancer treatment for about a year. How about Freddie Laker or PeopleExpress? I flew the latter a few times.

Once again we see what pisses off the voters in Cantor’s well deserved defeat. Both partys are captives of lobbyists catering to crony capitalist firms. Competition is constrained via bought and paid for alliances with government regulators. The old GOP can’t die fast enough for me.

You know, I’m all for cutting down on costs too, but how’s that working out for the average American worker’s income now that he/she is competing with third-world labor, eh? Works great for corporate profits, great for politicians’ pockets, but not so great for workers’ salaries.

You know, I’m all for cutting down on costs too, but how’s that working out for the average American worker’s income now that he/she is competing with third-world labor, eh? Works great for corporate profits, great for politicians’ pockets, but not so great for workers’ salaries.

xNavigator on June 12, 2014 at 8:25 PM

Good Lord man – granting yourself a $15 minimum wage courtesy of the unions so you have a “liveable wage” does not, in any way shape or form, give you “a liveable wage” – All you’ve done is shifted the baseline of ZERO higher… your $15 is still worth $7… you just think you have more of it and the socialist utopians go back to fortifying their power bases where they don’t have to worry about MONEY at all because their power comes elsewhere.

The world is coming together as one – there’s no stopping it now and we can either be freemen or subjects to the socialist utopians womb-to-tomb control in the matrix while the “philosophers” control us all.

Good Lord, man – talk about a non sequitur! Who broached mandating a minimum wage between the two of us? Oh, YOU.

For those of you who are so enamored of free trade with as few as possible governmental restrictions upon corporations, so as to afford them the greatest ability to be profitable (a laudable goal, for sure!), I congratulate you on your support of open borders! After all, a truly free global economy, as you’re advocating here in this thread/topic, allows corporations to utilize labor as they see fit, whether through outsourcing for it, or importing (visas) it.

The world is coming together as one – there’s no stopping it now and we can either be freemen or subjects to the socialist utopians womb-to-tomb control in the matrix while the “philosophers” control us all.

Yes I support free trade and anything that doesn’t involve some government busy body telling me how I should be doing things.

Don’t you?

I support open borders so long as government gets out of the benefits business. That’s also why I support free markets. So I don’t become a slave providing for all the grasshoppers the government wants to let in with the promise of free healthcare so they can enrich themselves with cheaper labor and more votes.

…with a business model that employs Thailand-based flight crews through a Singaporean pilot supply company, unions are calling it the “Walmart-ing” of the international airline industry and entrenched corporations are not at all pleased with the competitive prices NAI is offering.

So I take that to mean delivering a good product to consumers at an attractive price point. What could be wrong with that?

Yes I support free trade and anything that doesn’t involve some government busy body telling me how I should be doing things.

I’m sure you wouldn’t use any government laws related to workplace safety to sue a company if you were harmed on the job, right? Get the government out of being a busybody! You would have been right at home in the meatpacking industry in the early 1900s! FREE MARKET AT WORK!

Don’t you?

I believe in free trade, but not unfettered of any government intervention or accountability at all.

I support open borders so long as government gets out of the benefits business.

Hahahaha! You do realize that, even without a single state or federal benefit, millions upon millions of poor and uneducated people would wash over the border like a tidal wave, right? I hope you realize that.

Throw open the borders! That will be GREAT for the average American worker’s income and livelihood!

That’s also why I support free markets. So I don’t become a slave

If you think the average American is a slave, you have an extremely cloistered understanding of the world at large, and a deficient dictionary. Try living overseas, as I did for years, and experience real poverty and slavery around you.

If you want a really free market, go to Mogadishu. It’s the Wild West economically! Believe me, the government is out of your way!

For those of you who are so enamored of free trade with as few as possible governmental restrictions upon corporations, so as to afford them the greatest ability to be profitable (a laudable goal, for sure!), I congratulate you on your support of open borders! After all, a truly free global economy, as you’re advocating here in this thread/topic, allows corporations to utilize labor as they see fit, whether through outsourcing for it, or importing (visas) it.

Can’t speak for the others, but my view of the border situation is that it’s not about low-wage workers coming in and undercutting American workers. It’s about the U.S. as a sovereign nation controlling who is here, for how long and knowing for what purposes they are here.

As for the economics…we are facing an increase in low-wage to idle people/workers as it is. What happens when foreign citizens come over here and can’t find work, lose their jobs, or decide they no longer want to work…but stay? Then the “system” feels obligated to provide them with welfare services. We’re broke. If they make below a certain amount (or claim to make little) then they pay little in the way of taxes, so the burden is picked up by the existing American middle class.

You also can’t blow off the fact that many immigrants have children over here who are often taken care of through welfare. Few illegal immigrants own property, so pay nothing towards the school taxes to support those schools their children attend.

Also, much of that money earned over here flows back to their respective homelands. And you’re comparing apples to oranges…a Dollar in the Third World has much more spending power than here in the States. I don’t think immigration would be such a big problem if Mexico and the U.S. were even economically.

I think even in a free market system there is such a thing as unfair business practices…in this case employers in certain industries actually wanting immigrants that they know they can hire for much less-and those immigrants doing quite well for themselves “back home” with the money made over here. And for the government to turn a blind eye to immigration law-breaking is a de facto award of economic favoritism to one economic group over another.

Isn’t the House controlled by “free market supporting” Republicans? See, True Conservatives, this is the problem with GOP. If they prohibited gay pilots, they would be welcome by TCs, and this thread would be 34 page long. But pandering to unions? Yawn. Who cares?

The world is coming together as one – there’s no stopping it now and we can either be freemen or subjects to the socialist utopians womb-to-tomb control in the matrix while the “philosophers” control us all.

The New Socialist Man and Woman love the big international bankers and corporations when they promise total economic equality for the proles…especially those of the American bourgeoisie.

Perhaps they figure they can use these types with all the money and the power to take over, and off them later on…after all, there’s only maybe a few thousand of them altogether that control the lion’s share of the earth’s total worth. The alternative view is that in a future NWO Utopia, so what if there are a few George Soros’s around who own billions, or Rothschilds who maybe are worth in the trillions?

A few thousand white, greedy people are tolerable (as long as they’re down with Socialist NWO thought in spirit), but millions of white (and traitorous well-to-do “Uncle Toms” amongst the “Brown People”) they find sickening and to be the real Enemies of the People.

Some mansions tucked away here and there out of site are no big deal…especially if they are theirs…after all, if one works hard to improve the lot of the Proletariat, why shouldn’t one have a few amenities? Millions of Westerners with little to no higher education (meaning that of the highest levels of Academia and the Leftist pseudo-Intellegentsia networks-the secret knowledge imparted to the most gifted and promising of the initiates) with shiny cars and trucks, and big green lawns, and grills out in the backyard near the swing sets is what gets their blood boiling.

Can’t speak for the others, but my view of the border situation is that it’s not about low-wage workers coming in and undercutting American workers. It’s about the U.S. as a sovereign nation controlling who is here, for how long and knowing for what purposes they are here.

Dr. ZhivBlago on June 12, 2014 at 9:25 PM

That is government interference in the free flow of goods and labor in the free market! Those who believe in an unfettered free market, without government intervention, should logically support an open border, because the free flow of goods and labor should not be impeded by government interference. That is, in fact, the position of companies and politicians who support a market free of government interference; to open the borders to greater and greater numbers of workers (skilled and unskilled) from overseas.

Of course, I find such a stance hilariously contradictory and idiotic (‘I don’t like the government meddling with corporations’ attempts to get lower labor costs overseas! I like the government meddling with corporations’ attempts to get lower labor costs here at home, so please shut down the border to inflows of labor here at home!’). Then again, humans are contradictory creatures. None of us is perfectly logical. Some just struggle more than others with identifying their own double-standards.

Then you’re advocating for no borders, and therefore no sovereign nations and therefore a one world government system or no governments at all. I can only read that as being either anarchism or socialism.

There is no point to having borders if they are not controlled in some fashion.

Now, I would find it odd if the government allowed for absolutely no immigration, especially in a nation of immigrants. The sticking point isn’t how many workers come through, but whether there should be a, say, annual limit with certain regulations, or no limit and no regulations at all.

I still think you’re skirting the issue of the U.S. having to absorb the real world social costs of millions of poor immigrants who are being taken care of by the various states.

I’m not an anarcho-capitalist. I am not against the governments from federal on down regulating businesses in some way, nor against their ability to levy taxes. But when the balance goes against the American citizen, then I think the scales need to be tipped back in favor of the American citizen.

I’m not an anarcho-capitalist. I am not against the governments from federal on down regulating businesses in some way, nor against their ability to levy taxes. But when the balance goes against the American citizen, then I think the scales need to be tipped back in favor of the American citizen.

Dr. ZhivBlago on June 12, 2014 at 10:13 PM

I absolutely agree with that. I also agree with securing the border (and doing so before any further action on the issue).

I think some people reflexively react to any government intervention in the market as ‘bad, bad’ without thinking it through. We certainly have too much intervention right now in terms of regulations, and it is absolutely killing our economic growth and hurting people on a daily basis as a result. Ironically, we also have too little government intervention as regards the border.

I would reverse the pendulum on both of those policies. Fewer regulations in the market, but tighter border controls.

Erika, you think flying over the North Atlantic on an airline that’s “walmarting” their flight crews and aircraft is a good idea just to get a cheap ticket? A Norwegian airline that’s flagging their airplanes in Ireland to avoid taxes and laws, using Thai crews from a Singapore company to reduce costs? What else are they doing to reduce costs? Think maintenance. I’d even be willing to bet you make comments about the little regional jet’s and rail about wanting bigger airplanes with more amenities. Want more and bigger? Expect to pay for it.

United tried to do the same thing down here in Houston. Southwest flys out of Houston Hobby; most all other airlines fly out of George Bush international. Southwest proposed flying short international flights to Mexico. United tried to stop it; they weren’t successful. Southwest is now building an international concourse at Hobby.

Erika this is a very good thing that this is being blocked. I know that doesn’t make sense at first but if you research it more you’ll agree.

Your headline is akin to saying this about immigration: “Dear America: Sorry, but you can’t have more affordable goods and services because we won’t pass amnesty for illegal immigrants. Love, Congress.”

You would argue that blocking immigration isn’t about keeping prices high, and I’d agree. I promise you blocking NAI is not about keeping prices high, if it were then the airlines and unions would demand the parent company NLH be blocked. But they’re not.

When it comes to NAI you’re getting cozy at the cozy cone with the wrong side, come back to the conservative side.

Excellent business model, emulated by many other in Europe (Easy Jet, Wizz Air, Monarch) but apparently they (ryanair) are not interested in doing trans-atlantic flights. Not yet anyways. Closest we have here is JetBlue, I guess, and maybe Southwest & Frontier, but they’re a far cry from ryanair price-wise.

Erika, you think flying over the North Atlantic on an airline that’s “walmarting” their flight crews and aircraft is a good idea just to get a cheap ticket? A Norwegian airline that’s flagging their airplanes in Ireland to avoid taxes and laws, using Thai crews from a Singapore company to reduce costs? What else are they doing to reduce costs? Think maintenance. I’d even be willing to bet you make comments about the little regional jet’s and rail about wanting bigger airplanes with more amenities. Want more and bigger? Expect to pay for it.

TulsAmerican on June 12, 2014 at 10:57 PM

BS, that’s what they said about Ryanair when they started, traditional airlines were pissed off at their competition and went on and on about safety and how they (ryanair) would not meet the safety standards. Turned out Ryanair has a better safety record than traditional airlines. It’s 21st century, you can’t undermine these start ups without losing ground to the competition (china, etc).

I believe in free trade, but not unfettered of any government intervention or accountability at all.

xNavigator on June 12, 2014 at 9:11 PM

Whoa, whoa, whoa there Tex! What part of this article states that the airline would not have to abide by existing government regulations? In fact, the airline was applying per the government’s requirements.

This isn’t “unfettered”, this is playing on the same playing field as all the other airlines currently do, using the same rules and regulations. If some airline has purposely hobbled themselves with noncompetitive business practices, that’s their problem. Would you make fun of track meet officials if a runner in a race purposely tried hopping a dash on one leg instead of using both legs like other runners? No, you’d laugh at that fool of a runner.

You’re setting up a very poor strawman argument, and you needed called out on it.

Erika, you think flying over the North Atlantic on an airline that’s “walmarting” their flight crews and aircraft is a good idea just to get a cheap ticket?

TulsAmerican on June 12, 2014 at 10:57 PM

If by “walmarting”, you mean providing goods more efficiently and cost effectively to meet consumer demands, then why do you object?

You seriously undermine your arguments by not understanding the company you are comparing them to. WalMart has probably the fastest, flexible and most efficient distribution transport system in the US. They were doing just-in-time supply before JIT was a buzzword in the industry. They adjust retail supplies by store demographic, region demographics, and seasonal goods.

If this is how you’re trying to demonize another transport industry, by comparing it to one of the best transports for retail goods in the US, then you might want to rethink that “walmarting” label…